Mumbai, January 28, 2025 – Credo Brands Marketing Limited (NSE: MUFTI, BSE: 544058) has disclosed that the Additional Commissioner of Central Tax, Bengaluru North West Commissionerate, has upheld a GST demand of ₹1.92 crore, including penalties and interest, against the company for alleged short payment of taxes and excess Input Tax Credit (ITC) claims for FY 2017-18 and 2018-19. The company has announced its intent to challenge the ruling through further legal proceedings.
Key Details of the GST Demand Order
| Nature of Demand | Tax Amount (₹) | Penalty (₹) | Interest (₹) |
|---|---|---|---|
| GST Liability | 71,21,550 | 71,21,550 | To be calculated |
| GST / ITC Claim Issue | 1,44,622 | 1,44,622 | To be calculated |
| GST Shortfall | 36,76,456 | 36,76,456 | To be calculated |
| ITC Disallowed | 82,88,353 | 82,88,353 | To be calculated |
| Interest on Demand | - | - | 13,77,351 |
| Additional Interest | - | - | 49,228 |
| Total | 1,92,30,981 | 1,92,30,981 | 13,77,351 + Further Interest |
Background & Legal Proceedings
- Initial GST Demand (June 3, 2024):
- The Order-in-Original (OIO) was issued, alleging short payment of GST and wrongful ITC claims.
- Credo Brands had filed an appeal against the order within the permitted time frame.
- Appeal Rejected (January 27, 2025):
- The Order-in-Appeal (No. 32/2024-25 GST (COMM)A-II) dismissed Credo’s appeal and upheld the ₹1.92 crore demand.
- The company received the official copy of the order on January 28, 2025, at 12:45 PM.
- Next Steps:
- Credo Brands plans to pursue further legal action against the order within the stipulated time.
Company Statement
Sanjay Kumar Mutha, Company Secretary & Compliance Officer, Credo Brands, stated:"We are committed to ensuring compliance with all tax regulations and will take appropriate legal steps to challenge the GST demand order. We do not anticipate any immediate financial impact, as the matter is under appeal."
Impact on Credo Brands & Investor Outlook
- There is no immediate financial hit as the company plans further appeals.
- Potential provisioning in future financial statements if the dispute is not resolved in its favor.
- Continued regulatory scrutiny on ITC claims in the retail and apparel industry.